Private-equity giant the Carlyle Group, which has been snatching up properties throughout Brooklyn, just signed for a large parcel in East Flatbush for $14.5 million, according to a deed that appeared in the city register Tuesday. The purchase appears to be a rare commercial investment from a firm that has favored residential.
Through a limited liability company, the global investment firm, whose headquarters are in Washington, D.C., purchased the self-storage facility at 651 Utica Ave. in East Flatbush from a Massachusetts-based holding company comprising Equity Resource Investments and SNL Construction. Equity Resource Investments managing director Eggert Dagbjartsson signed the document on behalf of the seller, according to the deed.
The more than 35,000-square-foot site, which sits between Winthrop Street and Clarkson Avenue, has recently become mired in litigation. According to court papers filed in New York County Supreme Court last year, Equity Resource Investments is suing its business partner and the storage facility’s apparent developer, SNL Construction, a Lake Success-based company, for alleged “fraud, willful misconduct, and gross negligence.”
According to court papers, between 2015 and 2019 Equity Resource Investments and SNL Construction had formed limited liability companies in order to operate as a joint venture to develop 22 private self-storage facilities throughout the city and the state. Equity Resource Investments’ role was to provide equity financing, the court papers say, while SNL was responsible for the construction, development and operations of the properties, including the one at 651 Utica Ave.
But things didn’t go as planned, according to the lawsuit.
“Defendants have obtained and attempted to obtain money … by false pretenses,” court papers say.
The last document filed in the city register that’s associated with the Utica Avenue property before its sale this week shows SNL Construction co-founder Marc Sharinn’s signature on a 2018 transaction outlining the rents and lease agreement.
Sharinn is identified in the document as both the president of SNL and a managing member of the joint company. He’s also named in the lawsuit, which is seeking at least $3.7 million in damages for breach of contract, along with SNL’s other principals, including Michael Humphrey and Ari Goldman, according to the complaint.
The case is ongoing, and the next scheduled status update is set for May 3, according to court clerk Lauren Guerrera.
Attorneys for both parties did not respond to requests for comment, and attempts by Crain’s to reach Dagbjartsson and Sharinn were also unsuccessful.
As for the Carlyle Group, it’s unclear what the firm has in store for the embattled property. Crain’s recently reported that the company, which has an office at 1 Vanderbilt Ave., raised an $8 billion residential property investment fund several years ago and has been on a buying spree in Brooklyn ever since. The firm partnered with Z+G Property Group last summer to buy a luxury rental property in Williamsburg for nearly $100 million; and just before that, the company had also purchased a majority stake in a Gowanus Canal development for the same price, Crain’s reported.
The Carlyle Group did not respond to a request for comment.
Julianne Cuba , 2024-04-23 19:34:40
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